Hospitals oppose fixed payments in any laws tackling surprise billing
- In a letter to congressional leaders Wednesday, several hospitals groups said "the government should not set a fixed payment amount or reimbursement methodology for out-of-network services" that can result in surprise medical bills.
- As efforts to ban surprise billing have gained steam as a potential area for bipartisan compromise on Capitol Hill, the hospitals in their letter urged lawmakers to ensure health plan provider networks are comprehensive and directories are accurate. They also said any federal regulation should "default to state laws that meet the federal minimum for consumer protections."
- A separate analysis from the USC-Brookings Schaeffer Initiative for Health Policy, also released Wednesday, shows that about one in five emergency department visits involve an out-of-network provider and could therefore result in a surprise bill.
The letter, signed by the American Hospital Association, Federation of American Hospitals, America's Essential Hospitals and others, states patients should not be caught in the middle of payer-provider disputes that leave them with surprise bills and should be financially protected from them. While hospital groups may agree with existing proposals on that matter, they disagree over the tools to do so. "Health plans must work directly with providers on reimbursement, and the patient should not be responsible for transmitting any payment between the plan and the provider," the groups write.
With Democrats now in charge of the House of Representatives, hopes have risen for legislation to ban surprise billing at the federal level. The topic isn't new on the Hill. Toward the end of last year, a few bills were put forward addressing the issue. Their key differences lie in how they determine eventual payment to providers. Some cap charges at a certain rate based on regional pricing points, and some focus on arbitration to reach an agreed upon price between payer and provider.
Last month, the American College of Emergency Physicians put forward a framework for curtailing surprise bills, and emphasized it would not support rate caps. "We believe using those market forces is a better way to do it at this point and that would avoid the rate setting issue," ACEP President Vidor Freedman told reporters.
Some states have taken on the issue themselves. Some form of legislation aimed at protecting residents from surprise billing is found in 25 states, but only nine of those laws can be considered comprehensive, according to an analysis from The Commonwealth Fund.
The problem is many Americans have employer-sponsored health plans that are self-insured and those plans are regulated by federal ERISA laws. Even if a state has enacted some measure of protection for consumers stuck with a surprise bill, it doesn't apply to those ERISA-regulated plans, which are common among large employers. Many have called on fixes at the federal level to address this issue.
The Brookings paper makes a couple of recommendations for policies states can follow. One, a purely billing-focused approach, would set a limit on out-of-network charges — such as 125% of the relevant Medicare rate. That could be modified to reflect local market differences. The other, more hybrid approach would require that emergency and other facility-based services be in network with plans that the facility itself is already in network with.
The authors note that surprise billing is a problem for more than patients hit with sticker shock. "Not only are surprise out-of-network bills financially burdensome to the individual patients receiving them, but ED and ancillary physicians' ability to engage in out-of-network billing enables these physicians to demand high in-network rates, which makes contracting with these physicians quite costly, and in turn increases insurance premiums," they wrote.
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